When does interest arise in the UK or from a UK source? In Perrin v HMRC [2014] UKFTT 223 (TC) the First-tier Tribunal dismissed the taxpayer’s appeal against HMRC’s decision that interest paid by the taxpayer to an Isle of Man recipient arose in the UK so that tax was deductible. The FTT looked at the relevant factors and the weight to be attributed to them.
What issues did this case raise?
Mr Perrin a UK resident paid interest to the trustee of an employer funded retirement benefit scheme (EFRBS). He needed to deduct tax if the payment was ‘interest arising in the UK’ or had a UK ‘source’. He did not deduct tax and HMRC assessed him for the missing tax.
The loan creditor was Isle of Man resident the...
